Weekly trading forecast Aug 06 - 10

The upcoming trading week continues the series of important meetings from major central banks. New Zealand and Australia are among the headliners. There is also scheduled a pack of important economical reports from China and Japan - two biggest Asian economies. And also there will be released some of the crucial reports from major economies like the U.S. the U.K. and Euro Zone, which could add some puzzles into the picture of what the autumn is going to be like? Will we see a huge trend due to the worldwide economy is showing strong performance? Traders and investors in the financial markets will try to find the answer to these questions next week.

Monday, 6 August.

The Chinese government is going to announce how far they can go with their supportive measures for the send biggest economy and the local currency. We’ve been seeing some recent slowdown in the Chinese economic growth which is measured as an indicator for the wider picture. The German Factory orders and European Retail PMI reports will continue a quiet trading session on Monday. The American session is almost empty as well with only insignificant CB Employment trends Index is planned to be announced. SO we do not expect any huge volatility on the market during the first day of the trading week.

Tuesday, 7 August.

Tuesday is going to be much more interesting with the Bank of Australia announces the rate decision. It is widely expected to remain unchanged, but all eyes will be focused on the Statement in order to understand the further monetary policy of the regulator. AUD/USD trades in the same tight range and this news might have an impact on both bulls and bears sentiment. The event is scheduled for 05:30 AM GMT and whipsaws are possible for all Aussie pairs. Japanese economy reports Household spendings and Leading and Coincident Indicators, which are going to determine the trading week for USD/JPY in the scope of BoJ soft monetary policy. German and French Export figures are scheduled to release on early European session with more focus on German Industrial Production report. This news might cause a temporary support for the weakening Euro. Otherwise, we might see a further acceleration of the recent downtrend for EUR/USD. Halifax House Price Index is due to release at 08:30 AM GMT in the U.K. The British pound bulls desperately need some good news from the economic reports in order to stop the Pound from falling. Tuesday is also the big day fro Brasilian Real traders since the BCB Coop Meeting Minutes will have a huge impact on the volatility. The U.S. JOLTs Jobs Openings is going to confirm almost full capacity in the labour market, but the influence is not expected to be high. While the Canadian data of IVEY PMI report could confirm the strength of the Loonie and resume the USD/CAD downtrend.

Wednesday, 8 August.

Current account from Japan, Home Loans from Australia and New Zealand Inflation expectations - those reports will determine the price action on Wednesday Asian session. The main event is the speech of RBA Governor Lowe though, which starts at 04:05 AM GMT. Chinese Exports, Imports and Trade Balance figures are tentative in the calendar, but these reports are also important not only for the Yan traders but also for NZD, AUD and JPY as well.European trading session is going to be rather quiet with only Spanish Industrial Production to be announced. On the other side of Atlantic, traders will be watching Canadian Building Permits, as this topic is crucial for next interest rate hikes from BoC. Commodities market will pay attention to the U.S. Crude Oil Inventories report, which traditionally has a huge impact on Crude Oil WTI prices. The expectations are positive for Oil bulls with a decline of -2.794M barrels is anticipated. The lowering inventories might push producers to add capacity while the speculators could have a support from the growing demand in the U.S.

Thursday, 9 August.

Thursday starts with the rate decision from RBNZ. New Zealand regulator has been hawkish recently with the economy growing on a stable pace and the inflation pressure pushing them to hike the interest rates. The consensus is to remain unchanged though. But any comments from the RBNZ officials to tighten in the nearest future might lift NZD/USD to break through the recent consolidation channel and confirm the reversal technical patterns. So the statement coming together with the rate decision is going to have a much more powerful impact on price action and volatility. Any disappointment in the regulator’s hawkish tone could lead to the opposite reaction and NZD/USD could post new 6-month lows.Chinese inflation figures are among the major economical reports on Thursday as well. ECB Economic Bulletin is not expected to weigh on either bulls or bears for EUR/USD currency pair, so the market direction will be more determined by the U.S. PPI report, which scheduled for the NY opening at 13:30 PM GMT. A 0.2% monthly growth is widely expected with a room for a positive surprise, while the yearly number is forecasted to be flat at 3.4%. Anyway, the inflation pressure is still one of the biggest concerns for the Fed and one of the biggest drivers for the regulator to keep the tightening cycle.

Source: Investing.com

Friday, 10 August.

Japanese GDP is one of the main events for the whole week. It is due to release at 12:50 AM GMT. The growth figures are expected at rather high levels: 1.4% on yearly basis and 0.3% quarterly. Any disappointment might lead USD/JPY bears to control the market with more pressure on the prices. French Non-Farm payrolls are one of the main reports from the Eurozone this coming week. The British economy will report about second-quarter business investments, Construction Output, Exports and Import volume, Manufacturing Production and Q2 GDP. This pack of important events is very important not only for the currency traders but also for the Bank of England which is in a tight position. From one side there is a pressure from hawks to keep hiking the interest rates due to the inflation, and from another side, there are big concerns about the British economy to withstand those hikes and be able to grow in a sustainable manner. So the Cable volatility is going to be huge during the release at 09:30 GMT on Friday. The trading week finishes with the U.S. Core CPI report. The greenback could have support as the expectations are rather modest with a certain room for a positive surprise. The same story is for the Canadian Dollar. Canadian employment figures were strong recently and the market consensus is at modest 17.5K jobs added in July with the previous month reading at 31.5K, so USD/CAD might face a pressure in case if the report will come out strong.

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